Post Session: Quick Review

The penultimate session of F&O series expiry proved a bad one for the Indian bourses, as markets never attempted any recovery, instead declined sharply in second half to lose their crucial psychological levels. Traders which were looking in cautious mood ahead of the Federal Reserve's policy panel meet, which ends later today, eyeing how the US central bank's policy statement today interprets recent soft US economic data and events in global financial markets, came into selling mood fearing more downside. Traders even overlooked the development of government setting up a high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws, a report that could form basis for tinkering with the controversial retrospective applicability of tax and a World Bank report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year.

On the global front, following the overnight weakness in the US markets, Asian markets too ended lower led by the Chinese market as investors’ awaited commentary from the Federal Reserve. The Japanese market though bucked the trend and despite paring gains, ended higher for the day on some good earnings and as yen weakened. The European markets though made a modestly positive start after Sweden’s Central bank keeping benchmark rate unchanged expanded its bond-purchase plan for a fourth time since February.

Back home, amid the weak trend caution ahead of expiry of October month contracts in the derivatives segment tomorrow kept influencing the sentiments. The benchmark BSE Sensex slipped below the crucial 27,000 mark while the NSE Nifty dipped below the 8,150-level intraday due to sustained selling. However, there was modest bounce back in the final moments on some reports that government is mulling hiking foreign direct investment (FDI) cap in public sector banks to 49% from the present 20%, it was also reported that government may consider raising FDI cap in media too. The broader markets that once again were seen outperforming the benchmarks too lost the direction and made a mixed closing. On sectoral front consumer durables remained in cheerful mood along with IT and tech stocks that gained on rupee weakness. The jewellary stocks too remained in jubilant mood after a report that India regained its top position from China as the biggest overall consumer of gold in the first nine months this year with a total consumption of 642 tonnes. Tribhovandas Bhimji Zaveri was up by around 4%, Titan gained around 3% and PC Jeweller surged by over 8%. On the other hand banking, power and realty suffered the most, while selling pressure was seen in oil & gas stocks too amid continued slide in global crude prices.

The BSE Sensex ended at 27052.24, down by 201.20 points or 0.74% after trading in a range of 26919.96 and 27163.98. There were 11 stocks in green against 19 stocks in red on the index.

The broader indices made a mixed closing; the BSE Mid cap index was down by 0.57%, while Small cap index ended tad higher by 0.01%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.41%, IT up by 0.43%, TECK up by 0.42%, while Bankex down by 2.49%, Power down by 1.50%, Realty down by 1.09%, PSU down by 0.78%, Auto down by 0.62% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.40%, ONGC up by 1.43%, Bharti Airtel up by 1.42%, Hindustan Unilever up by 0.88% and Tata Motors up by 0.85%. On the flip side, Axis Bank down by 7.13%, ICICI Bank down by 3.95%, SBI down by 2.88%, NTPC down by 2.11% and Dr. Reddys Lab down by 1.89% were the top losers.

Meanwhile, amid buzz of government finding it difficult to meet the disinvestment target, Finance Minister Arun Jaitley has said that there is no cause for concern on fiscal deficit and the government will meet its target for the current fiscal, though there are challenges on the disinvestment front. He said that lower receipts will not upset the fiscal maths and there will be no difficulty in achieving the fiscal deficit target of 3.9 per cent set for the current fiscal year.

Speaking at India Africa Forum Submit in New Delhi, the FM further said that “I had deliberately kept a very modest fiscal deficit target that is the movement from 4.1 per cent which eventually became 4 per cent to 3.9 per cent (in 2015-16). The manner in which tax revenues and expenditure are moving, I don't see there's going to be any difficulty'.

Acknowledging that disinvestment is a challenge mainly on account of global problem, Jaitley said that metal stocks which were the large part of the kitty that the government has planned for the current fiscal year are not performing well. Earlier, Union Minister of State for Finance Jayant Sinha too had said that the Government’s disinvestment target is fully dependent on market conditions.

Recently, it was reported that the department of disinvestment (DoD) has said that it wants the PSUs stake sale target to be more than halved to Rs 30,000 crore for the current financial year, stating that this target seems more reasonable given that there is no big stock to sell. For the fiscal year 2015-16, the government has targeted to raise Rs 69,500 crore through disinvestment, 180 per cent higher than the total amount garnered from PSU share sales in the previous fiscal. Out of the total budgeted target, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from the strategic stake sale. 

The CNX Nifty ended at 8179.40, down by 53.50 points or 0.65% after trading in a range of 8131.80 and 8209.10. There were 20 stocks on gainers side against 30 stocks on losers side on the index.

The top gainers on Nifty were Cipla up by 2.29%, Tech Mahindra up by 1.90%, Kotak Mahindra Bank up by 1.83%, Ambuja Cement up by 1.80% and ONGC up by 1.53%. On the flip side, Axis Bank down by 7.22%, ICICI Bank down by 3.98%, Adani Ports &Special down by 3.12%, Indusind Bank down by 3.10% and Yes Bank down by 3.08% were the top losers.

European markets were trading in green, UK’s FTSE 100 was up by 13.77 points or 0.22% to 6,379.04, France’s CAC gained 24.28 points or 0.5% to 4,871.35 and Germany’s DAX was higher by 68 points or 0.64% to 10,760.19.

The Asian equity markets ended in red on Wednesday, barring Nikkei on expectations that the Bank of Japan (BoJ) could introduce further stimulus measures at its policy meeting to be held later this week. The International Monetary Fund stated that Japan should stick to its plan to raise the sales tax from 8 percent to 10 per cent in April 2017 in order to deliver fiscal sustainability.  Japan’s retail sales fell to a seasonally adjusted annual rate of -0.2%, from 0.8% in the preceding month. Amid a continued economic slowdown, China’s unemployment rate for the first time in recent years has increased amid reports of layoffs by both state-owned enterprises and private sector firms due to over capacity and falling demand but the government has played it down. The registered unemployment rate in China’s cities stood at 4.05 percent at the end of September, slightly up from 4.04 percent in June. Activity in China's manufacturing sector likely picked up slightly in October but remained subdued, fuelling hopes that the world’s second-largest economy may be bottoming out after a burst of stimulus measures. The official manufacturing Purchasing Managers’ Index (PMI) likely edged up to 50.0 in October from 49.8 in September.